[size=14pt]Jonathan intensifies consultations on subsidy removal[/size]
By Yusuf Alli, Managing Editor, Northern Operation

[img]http://www.thenationonlineng.net/2011/thumbnail.php?file=Jonathan_166638470.jpg&size=article_medium[/img]
President Goodluck Jonathan

Despite a shocking resolution from the House of Representatives, President Goodluck Jonathan has intensified consultations over plans to withdraw fuel subsidy.

The President is also weighing options on when and how to withdraw the fuel subsidy.
But the President may extend his consultations on subsidy withdrawal to all the political parties, including the opposition, next week.
A meeting with the parties is billed for Abuja on Tuesday.

There were strong indications last night, however, that one of the options borders on the need for the presidency to make the withdrawal of subsidy "purely an executive decision."

The President is under pressure to adopt executive fiat to withdraw the subsidy.
The House of Representatives had on Thursday technically rejected the removal of fuel subsidy by describing the proposal from the executive as "premature."

According to findings, the presidency was shocked by the alleged 'cold' attitude of the House to the proposal on subsidy.
"In spite of the resolution of the House of Representatives, we have not heard the last word on the matter.

"You should remember that the Nigerian Governors Forum has endorsed the withdrawal of fuel subsidy. Whatever the House said as being premature, we consider it as its own contribution to the debate,” a top government source said.

"The President has rather decided to intensify consultations with stakeholders on the merit of the withdrawal of the subsidy. Even the President will still ask the House to have a rethink when it gets all the statistics,” the source added.

He said Jonathan was also likely to table the issue before all political parties in the country when he has audience with them next week.

"The audience with parties, especially the opposition, is part of a broad-based consultation programme designed by the presidency.

"The President does not want the withdrawal of fuel subsidy policy implemented with shocks for Nigerians," he said.

Another reliable source in the presidency added: "The government will certainly go ahead with the withdrawal of fuel subsidy by making it an executive decision after due consultations.

[b]"Once it is made an executive decision, whoever is aggrieved can go to court. As it is now, the unresolved challenge over fuel subsidy removal is affecting the presentation of the 2012 budget.

"The government cannot be grounded over an issue that is purely executive in nature."
Responding to a question, the source said by "virtue of Section 16 (1 and 2) of the 1999 Constitution as amended, the President can take an executive decision to withdraw the fuel subsidy.

Section 16 (1) (b)(c) reads in part: "The state shall, within the context of the ideals and objectives for which provisions are made in this Constitution -control the national economy in such manner as to secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equal of status and opportunity.”

Section 16(2)( c) says: "The state shall direct its policy towards ensuring that the economic system is not operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of few individuals or of a group."
Responding to a question, the source added: "The withdrawal of fuel subsidy is just now a question of when and how. That is why the President is being calculative in order not to hurt the system."[/b]

The Federal Government is proposing N4.8trillion budget for 2012 with a $70 to $75 benchmark price for oil.
Apart from the take-off of the Sovereign Wealth Fund, the government is also proposing savings of about N1.2trillion from the withdrawal of fuel subsidy.

But most senators and House members have asked their leaders to prevail on the President to meet four conditions.
The conditions are:
a publication of the list of the beneficiaries of past fuel subsidy;
[list]
[li]presentation of facts and figures or statistics on the true picture of the amount of fuel subsidy[/li]
[li]a comprehensive release of palliative measures Nigerians will enjoy if the subsidy is removed and Action Plan to make the measures work[/li]
[li]and concrete work plan on how to make all refineries function at optimal level.[/li]
[li][/li]
[/list]

I agree with the "legislooters" on this one. A concrete action plan has to be rolled out and followed doggedly. I support removal of subsidy but we have to protect ourselves against the corrupt system. There is every likelihood of the savings made to be looted by the roaring "politrickcians" who are constantly seeking for extra state funds to be devoured.

If I had my way, I will also ask that the funds saved be channeled specifically into power generation, revamping of refineries, rail transport and agriculture (in order of importance to energy security).

Is anybody still wondering why
SW so desperately wants to hold
on tightly to one Nigeria, at the
expense of SS and some SE states.
Refusing to either go left or go
right. They just took a lopsided
stand at the middle. Jonathan is
not a fool. He know his people
has been rode like a donkey all
these years. The more reason he
wants to end it all, no wonder GEJ said nigeria will crash if subsidy stays! MEND/Boko HARAM here is a fresh list of new targets! So get to work boys, kill them all!

SUBSIDY REMOVAL FOR NOW IS A MISPLACED POLICY - I SUPPORT THE 'OCCUPY NIGERIA' PROTEST!

GEJ should man up and explain to the nation why the mess in the oil sector still lingers on! As this subsidy debate lingers on, it is even moer obvious that the government have no idea of what it takes to get petroleum products imported and distributed to the pumps in this country! Even then, some may ask, what bussiness has the government with fuel importation when she can revamp existing refinaries, build new ones.

Get the present refinaries to work at 90% capacity and 99% utilization, build new ones before you can think of  subsidy removal! The money is there to build new refinaries, and within the first 3years of this government, if she is sersious at all, 4 refinaries can be built.

For NOW, I AM AGAINST REMOVAL OF FUEL SUBSIDY. When the government gets our refinaries working, build new ones and clean up the mess in the down stream sector of the petroleum sector, then subsidy can be removed.

Boyloaf:

Is anybody still wondering why
SW so desperately wants to hold
on tightly to one Nigeria, at the
expense of SS and some SE states.
Refusing to either go left or go
right. They just took a lopsided
stand at the middle. Jonathan is
not a fool. He know his people
has been rode like a donkey all
these years. The more reason he
wants to end it all, no wonder GEJ said nigeria will crash if subsidy stays! MEND/Boko HARAM here is a fresh list of new targets! So get to work boys, kill them all!

Misplaced comment! Ever wonder what your Orubebe did with over N1trillion budget for Niger Delta ministry? What about the massive waste/looting currently on going at NDDC? Maybe we SS needs to learn a lesson from how the north utilized PTF to their benefit.

Fake Subsidy and Fuel Subsidy
(II)

Simon.Kolawole@thisdaylive.com I’ll go straight to the point: the current debate on fuel pricing is headed nowhere until we get the facts and the figures right. There is “fake subsidy”— amounting to over N1 trillion in 2011 alone; and there is “fuel subsidy”—which may not be more than N300 billion this year. I will explore further the “fake subsidy” aspect today. Last month, I narrated an encounter I had with an insider in the oil industry in 2009 who told me the dirty secrets of the subsidy business. One day, we would come to realise that the biggest fraud in the history of Nigeria is this thing called fuel subsidy, especially in the last 10 years. I have gathered so much information on this monumental fraud (since my last article on it) that I am so depressed. But I believe that with sincerity of purpose, we can overpower these gangsters who are looting Nigeria silly. Today, I have only one proposal for President Goodluck Jonathan: set out to find out the real truth, and nothing but the truth, about this subsidy regime through a proper probe. The best way is NOT to set up a panel headed by, and made up of, the same people holding us hostage. The Senate says it wants to probe fuel subsidy but why do I find this difficult to believe? The senators I know are not really bothered about anything. I would rather think they are worried that they have been left out of the subsidy action. So I have no faith in the Senate probe—even though I believe they should still go ahead for whatever it is worth. We were all here when the House of Representatives woke up one day and said they wanted to probe the expenditure in the power sector between 1999 and 2007. What was the outcome? Can someone please remind me? I am one of those who believe staunchly that the National Assembly is not to be trusted when the issue at stake is the progress of Nigeria and Nigerians. President Jonathan, I would suggest, should appoint an internationally renowned accounting firm to carry out a comprehensive audit of the fuel subsidy regime. In the alternative, he could set up
a body made up of Nigerians who still have integrity, persons who do not worship money, persons who believe— and have shown through the years—that a good name is better than silver and gold. The probe should cover all the areas we have been asking questions and not getting answers over the years. The first area is local fuel consumption. According to the Nigerian National Petroleum Corporation (NNPC), we consume 32 million litres of petrol per day. This fact needs to be verified. This is because subsidy is based on the volume of consumption. We need to establish, as a matter of urgency, how many litres we actually consume daily. The major benefit of this is to determine if indeed the consumption figures are “sexed up”. That should provide us with the foundation for further analysis. The second area of the probe should cover the local refineries. What is the production level on a daily basis? How many litres of every product do they produce? How are the products distributed or sold? At what prices are these products distributed? Who are the receivers of these products? What records exist to that effect? NNPC told us recently that the refineries were working at 60 per cent capacity. What does that mean in practical terms? There are about 78 litres of petrol in every barrel of crude oil (source: Texas Oil and Gas Association). Our four refineries have a combined capacity of 445,000 barrels per day. If, therefore, they are working at 100 per cent capacity, the petrol yield would be around 30 million litres per day. If they are working at 60 per cent, that would be
18 million litres produced locally per day. It would mean our daily import need is just 14 million litres. These figures may not be accurate—since the configurations of the refineries are different—but the onus will now be on the NNPC, and the subsidy probe panel, to provide us with the exact figures. How many litres of PMS do we get from a barrel? At what capacity is each refinery working? The third area of interest is the fuel import component. If indeed the refineries are working at 60 per cent and we import only 14 million litres daily, how do we now arrive at a uniform subsidy? What is the “landing cost” of fuel refined at Warri? Is it the same cost as fuel imported from Venezuela? The fuel from Venezuela should cost more, of course. Shipping is involved. Demurrage is involved. Throughput and storage costs are also involved. So how is the current landing cost of N144 per litre arrived at? Furthermore, does every litre of fuel we import incur demurrage? Do we import the same grade of fuel? If not, why then do they all have the same “landing cost”, no matter the quality? These questions will help us to be able to differentiate between the actual costs and how we have been paying the same “landing cost” for our consumption for many years now. Four, who are the fuel importers? We need to get a comprehensive list: when and where the companies were registered, as well as their competences and pedigrees. On the list, we need to see
actual data on quantities imported by every company and how much each company was paid for its supplies. We need to know the origin of the products (that is, where they imported the products from) and the prices at which those refineries sell their products to buyers. We must be able to trace the source of every cargo. We must then go and verify these costs from the sellers. We need a proper forensic investigation. This particular inquiry is very critical so that we can get the real figures on the costs of these products. The moment we are able to trace the origin of the fuel and
the quality, we would be able to determine the actual cost at every point in time. After all, it is an open-market business. Five, how much has NNPC spent on demurrage in the last six years? The bill, I understand, is in excess of N1 trillion. Why does NNPC pay demurrage? Because its reception facilities at Atlas Cove are inadequate for the quantity of products imported by its contractors. Now, commonsense dictates that NNPC could have spent a fraction of that amount to expand the reception facilities at Atlas Cove and save us the scarce resources. Closely related to this is: what informed NNPC’s decision to store its imported products with private tank farms when indeed it could have built its own? How much have they paid to tank farms in the last four years? Most importantly, the idea of paying demurrage is because we import products. Over the last six years, what we have incurred in demurrage would probably have given us a new 400,000-barrel a day refinery which would forever banish the idea of importing fuel. I conclude. Don’t think our rulers didn’t know what they were doing by concentrating on imports and ignoring local production over the years. The biggest source of political patronage has been fuel import contract. That is the easiest way to produce emergency billionaires in Nigeria. The refineries are not working not because there is no solution to the problems. The government has failed to build refineries not because we cannot afford the cost or because of the so-called deregulation policy. If the refineries work and we produce all the fuel we need locally, a major source of patronage will be gone. Gen. Olusegun Obasanjo, a military head of state, built two refineries and started a third one all within three years in the 1970s. When he returned in 1999 as civilian president, he was shocked to discover that the refineries were all but dead. He blamed Gen. Sani Abacha for running down the refineries because Abacha wanted his family members to be
importing fuel. But by the time Obasanjo spent eight years and left in 2007, the refineries were still not working, neither was a new one built because of the excuse of “deregulation”. Look deep. Search deeper. Who were the people getting the fuel import contracts? Abacha’s family members? You guess is as bad as mine. The truth, if it must be told, is that the fuel subsidy fraud—perpetrated through the import regime—serves the interests of our rulers and their cronies. The “fake subsidy” needs to be removed. We need a
probe by eminent Nigerians or internationally renowned auditors to unveil the fraud so that we can begin a proper discussion on the real fuel subsidy and the way forward. Stay tuned.

these animals(gej, okonjo iweala, gov's forum etc) that have supported the removal of subsidy just want to increase the sufferings of the Nigerian pple. In a country where the citizens benefits nothing from their elected officials, why inflict more hardship on them? the price of petrol is tied to everything in Nigeria down to a sheet of paper, loaf of bread, beans, rice pepper etc. just N1 increament would sharply reflect on the prices of other product. does this animal know that close to 100million nigerians dont have constant electricity and they run petrol generator daily at a price of N65/litre, coupled with transport cost? even obj never dared to remove subsidy at once like this clueless gej wants to do. obj had the gradual strategy and from 1999 he increased from N20-N75 as at May 2007. cant Gej do same? why cant he fix a refinery between now and dec 2012?

I have always insisted that NNPC should be scrapped and all our refineries sold; this fake subsidy is just another way of looting.

That's an interesting piece lanre_front

After reading the article I have to agree with Simon Kolawole (the author of the article) that answers have to be provided for the questions he raised before any action is taken on this fuel subsidy issue. Only after can we then see how effective the subsidy removal will be. Too many areas of this issue are shrouded in mystery and for a govt that wants to be seen as transformational then making our fuel importation and consumption details transparent should be a high priority.